Evolution of the ESM funding strategy
Evolution of the ESM funding strategy
What began as a simple back-to-back funding strategy to raise funds quickly, where the bonds matched the loans disbursed, later developed into a diversified funding strategy where financing was pooled and then disbursed to adapt to shifting needs. Since the conclusion of the last ESM assistance programme in 2018, funding has been undertaken solely to finance the rollover of existing debt.
Following the ratification of its amended treaty, the ESM will provide the backstop for the Single Resolution Fund should additional emergency funding be required for bank resolution. The ESM is prepared for this as well, with a disbursement-in-kind strategy that allows it to issue bonds that can be lent directly to the beneficiary, without selling them to end-investors.
The ESM funding and investor relations team remains close to the markets and its investors, nurturing trust and stability in the euro area financial system.
